Basic Institutions of the Soviet-Type Economy: The Political and Economic Monopoly of the Politburo

Abstract

Lenin argued in 1921 that politics must inevitably have priority over economics. To argue differently, he said, was to forget the ABC’s of Marxism. He was able to convince his cohorts that the Party should be organized along the lines of democratic centralism. Under democratic centralism, members of the Party are free to voice their opinions on any issues while it is being debated. However, once the Politburo makes its decision on an issue, members of the Party must carry out that decision without any further criticism. In this manner, Lenin transformed the “dictatorship of the proletariat” into the “dictatorship of the Politburo.” The Politburo’s decisions became the law of the land. Thus, the Soviet-type economy is essentially a political phenomenon, where the advantages of political stability and political monopoly outweigh the disadvantages of economic inefficiency.

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(1990) Basic Institutions of the Soviet-Type Economy: The Political and Economic Monopoly of the Politburo. In: The Economics of Property Rights: Towards a Theory of Comparative Systems. International Studies in Economics and Econometrics, vol 22. Springer, Dordrecht